Obama rightly prods higher ed, but beware of flawed ‘scoring’

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For decades, the Democratic approach to improving college access has been for the federal government to subsidize loans for low-income students. It’s not working. Colleges and universities have simply responded by raising their prices, and Congress will never be willing to spend enough money to sufficiently fill the gap.

Now, however, President Obama is offering a greater spur to affordability: to create a rating system for higher education, scoring colleges in areas including average tuition, loan debt, graduation rates, and what graduates earn after getting their diploma. The idea is for Congress eventually to peg the government’s student-aid programs to these scores, directing students to more affordable institutions while reining in the $1 trillion of outstanding federal loans. The administration is also hoping to encourage more colleges and universities to explore cost-effective innovations, such as online coursework.

Obama is giving America’s institutions of higher education a needed push — but the administration’s scoring criteria should be expanded, and steer sharply away from the idea that future earnings are a decisive measure of academic success.

Obama wants the ratings system in place by fall of 2015. If Congress goes along, students at institutions that rank higher on the “effectiveness” scale would eventually be eligible for more federal financial aid. That is, students could get more generous loans for the most effective schools, and less-generous loans for the least effective. The penalties and rewards wouldn’t kick in until 2018.

The president is responding to what has become a crisis in higher education: Far too many students enroll, take on enormous debt, and then fail to graduate. And with rising tuition plus declining state support for public colleges and universities, students are assuming a growing share of the cost with little to no information on where the best values can be found. Giving students, parents, and lawmakers some guidance on which colleges are worthy of their money is a much-needed public service, especially for those considering for-profit colleges, which often engage in deceptive advertising.

Beyond the margins, however, it’s hard to see how the president’s plan will bring down costs significantly. Some colleges argue that rising labor expenses, such as the cost of health care and pensions, are responsible for tuition increases. Those don’t go away with this plan. The ratings system could also misfire when comparing, for instance, the future earnings of a English literature major at Bennington College to an engineering student at MIT. The government should give students equal access to worthy, but less lucrative academic endeavors.

Still, developing a credible system for measuring college quality could force higher-ed chiefs to turn their focus from inputs to outcomes. That alone makes the White House’s proposal a worthy learning experiment.